BANKING AFFAIRS

Detailed explanation-1: -Under the Reserve Bank of India, Act, 1934 (RBI Act, 1934) (as amended in 2016), RBI is entrusted with the responsibility of conducting monetary policy in India with the primary objective of maintaining price stability while keeping in mind the objective of growth.

Detailed explanation-2: -The Reserve Bank of India Act, 1934 (II of 1934) provides the statutory basis of the functioning of the Bank, which commenced operations on April 1, 1935. * To operate the credit and currency system of the country to its advantage.

Detailed explanation-3: -It can purchase and discount bills of exchange from commercial banks. It can purchase foreign exchange from banks and sell it to them. It can provide loans to banks and state financial corporations. It can provide advances to the central government and state governments.

Detailed explanation-4: -The RBI can accept interest-free deposits from the federal and state governments. It has the ability to buy and sell bills of exchange from commercial banks. It has the ability to buy and sell foreign currency through banks. It has the ability to lend to banks and state-owned financial institutions.

Detailed explanation-5: -Section 22 states that only the RBI has the exclusive rights to issue currency notes in India. Section 24 states that the maximum denomination a note can be is ₹10, 000 (US$130). Section 26 of Act describes the legal tender character of Indian bank notes.